SM TIMBS v NSW MINISTERIAL CORPORATION (FORMERLY GOVERNMENT INSURANCE OFFICE OF NSW) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY and COLE JJA 10 March 1995, 10 March 1995 [1995] NSWCA 470 No question of principle. Mahoney JA The court is in a position to give judgment and I will ask Mr Justice Cole to give the first judgment. Cole JA The appellant is a solicitor who was injured in an accident on 11 January 1987. She was born in 1945 and thus was forty-two at the date of the accident. She had been employed by Messrs Taylor and Scott since 1979 and in the intervening eight years with that firm had risen to the position of an associate partner. After the accident in January 1987 she resigned from that firm on 30 October 1987 to take up employment with Cutler Hughes and Harris, commencing there on 16 November 1987. She made that change in circumstances where she was being asked to undertake a heavier workload at Messrs Taylor and Scott, and in circumstances where she wished to foster her interest in family law, it being her intention to seek to establish, as it were, a division or practice in that area within Cutler Hughes and Harris. However, she remained with Cutler Hughes and Harris only until December 1988, a period of some thirteen months, when she resigned. The trial for injuries suffered by her in the accident was heard in April 1993 and resulted in a verdict in her favour in the sum of $558,957. On this appeal a number of matters have been raised and I shall deal with them sequentially. The first matter which arises involves the rate at which his Honour calculated past and future economic loss. The appellant contended that his Honour should have adopted a higher rate of earning and thus a higher rate of earning capacity, being the rate which the appellant was in fact earning at Cutler Hughes and Harris where she had remained for some thirteen months. The respondent, on the other hand, contended that the rate to be taken should be based on that earned whilst she was employed by Messrs Taylor and Scott for a period of some years. His Honour actually took a rate which was slightly more than the Taylor and Scott rate for the future, namely $1,000 per week. In so doing his Honour treated that as a general figure which took into account matters such as superannuation. In relation to the past economic loss his Honour awarded $143,052.82 being the calculation based on the past loss of earnings using the Taylor and Scott rate. There were adequate reasons why his Honour was entitled to adopt such a rate. First, as his Honour indicated, his Honour found that as a result of the accident there was a loss of earning capacity of some 50 per cent. However, his Honour did not deduct the loss of 50 per cent from past earnings, recognising when so doing that he may be accused of some generosity. Second, his Honour was entitled to take into account the fact that the appellant had been with Taylor and Scott for some eight years but had been able to remain with her new employers only for some thirteen months before resigning. It may 2 UNREPORTED JUDGMENTS well have been his Honour's view that that circumstance, coupled with surrounding circumstances, indicated to his Honour that the reality was that the nature of the work which the appellant had demonstrated she was able to cope with was that which was found at Messrs Taylor and Scott and which attracted a lesser income than that which she sought to do at Messrs Cutler Hughes and Harris but could sustain only for a period of some thirteen months. In those circumstances, in my view his Honour was entitled in calculating the past economic loss to have regard and to adopt calculations based on the Taylor and Scott figures. It follows, in my opinion, that ground 1 fails and accordingly, so does ground 2. In relation to the future economic loss, as I have said, the trial judge adopted a figure of $1,000 per week. In so doing his Honour firstly addressed the question of superannuation entitlements. That had been submitted by the appellant as a separate item of calculation, although the figures in relation to that item were not large, namely, some $7,000 for past superannuation entitlements and some $2,000 for future superannuation entitlements. The rate of income in fact based on the Taylor and Scott experience was some $16 odd less than the $1,000 which his Honour assumed for calculation purposes. The superannuation entitlement was said to be 3 per cent, that is approximately $30 on such a rate. By increasing the figure to $1,000 his Honour was in fact allowing some $16 in respect of superannuation. His Honour did so in circumstances where, as I will indicate shortly, the appellant's position in relation to her present circumstances was such as to give rise to significant uncertainties concerning the future. His Honour adopted that figure which, in my view, clearly does include his Honour's assessment of superannuation entitlements. After dealing with the superannuation entitlements at the top of page 441 of the Appeal Book and thereafter immediately accepting the $1,000 per week figure, taking "'all matters into account", his Honour then did a calculation in which he sought to determine a figure for future economic loss. The manner in which the calculation was performed was to note that in fact the appellant was earning $255 per week at the time of the trial doing some work in her husband's legal practice. His Honour then deducted that $255 from the assumed future earnings of $1,000 per week to produce a derivative of $745. That figure was then divided in half, apparently to seek to reflect the 50 per cent loss of earning capacity. That figure was then further discounted after the multiplier had been applied in circumstances where, applying the multiplier, his Honour achieved a figure of $449,160 as being the present value of $745 for seventeen years. That was halved to account for the 50 per cent loss of earning capacity to produce a figure of $224,580 and then further discounted to $200,000. In my view the calculation was in error. The correct approach was, having taken a $1,000 per week earning capacity and having found that there was a residual earning capacity of 50 per cent, to take the loss as being $500 per week, to determine the present value of that loss for the ensuing seventeen years and then to apply a discount for vicissitudes of some 15 per cent. If that calculation is done the court has been informed that the figure derived is $256,000 rather than the $200,000 which was in fact allowed. In those circumstances, in my view the third ground of appeal should be upheld and the amount awarded to the appellant should be increased by the difference of $56,000. (gRU TIMBS v NSW MINISTERIAL CORPORATION (FORMERLY GOVERNMENS INSURANCE OFFICE OF NSW) (Cole JA) The fourth ground of appeal related to future housekeeping expenses. The appellant claimed $60 per week for a period of thirty-two years, producing a figure of $50,700. The learned trial judge allowed $15,000. It was said that such a discount was far too high. It is to be recalled that the appellant and her husband are both solicitors. His Honour formed the view that: "One would have thought that household help would have been hired in any event." There is a sound basis for his Honour reaching such a finding: "Bearing in mind that husband and wife following their professions as solicitors on a full time basis would, in all probability, seek such assistance, especially as they got older, I think a figure of $15,000 would be appropriate to meet this matter for the future." In my view, that is a finding of fact that was open to the learned trial judge and no basis has been indicated why this court should interfere with that finding. The fourth ground of appeal fails. The fifth ground of appeal sought recovery of specific sums for superannuation. I have dealt with that. It was included in the figure of $1,000 per week which his Honour selected as the appropriate figure for loss of earning capacity. The final ground of appeal related to future treatment expenses. The sum claimed was $50,607. His Honour allowed a figure of $20,000. The amount sought under this head relates to future medical expenses from a general practitioner, a psychiatrist, an orthopaedic specialist, physiotherapist, masseuse and expenses for Panadeine Forte, and Panalgesic, and for swimming fees. The appellant has, in some respects, an unhappy past. She has been subject to severe anxiety and tension stresses in the past which have resulted in her overdosing on three occasions and cutting her wrists on another. Those all occurred pre-accident. It seems to me that in those circumstances his Honour was entitled to take into account that many of the expenses which it is said were required, namely those relating particularly to a psychiatrist, perhaps physiotherapist and certainly the drugs which would be required for the future, are costs which in any event may be likely to have been necessary. It is true that the requirement for the drugs and treatment which are claimed under this item were said to be necessary by various medical practitioners. Nonetheless, having regard to the previous history of the appellant his Honour was entitled to introduce a significant discount in relation to the amount claimed. His Honour said that there were very many imponderables in relation to this aspect and other aspects of the case that needed to be taken into account. Having regard to that, in my view it has not been demonstrated that the deduction his Honour made from $50,000 to $20,000 was beyond the range which was open to him. Accordingly, ground 6 fails. There was a cross-appeal lodged by the respondent but it was accepted that it would be an almost impossible task for that to succeed as it would involve this court rejecting a clear finding of fact by his Honour in preferring the evidence of Dr Courtenay. In those circumstances, the cross-appeal should be dismissed. In my opinion, the appeal should be upheld. The judgment of his Honour should be set aside. In lieu of the verdict of $558,957 there should be substituted a verdict of $614,957 to reflect the additional $56,000 for loss of future earnings. The appellant, in my opinion, should have her costs. MAHONEY JA: The assessment of damages in this case is, as Mr Justice Cole has said, complicated very considerably by the appellant's pre-accident condition and her history. The trial judge, subject to the matter to which Mr Justice Cole 4 UNREPORTED JUDGMENTS has referred, attempted to cope with those uncertainties. Different conclusions might be arrived at by different minds but, for myself, I am not convinced that the ultimate conclusions arrived at by the judge in respect of the matters generally were wrong. They are not significantly different from the conclusion at which I would have arrived. I speak subject to the one matter to which Mr Justice Cole has particularly referred. Accordingly, therefore, I would agree with the orders which have been proposed. The order of the court will therefore be that the appeal is upheld; the judgment is set aside and there is substituted for the judgment below the judgment to which Mr Justice Cole has referred. The judgment is to take effect from the date of the judge's judgment. The cross-appeal is dismissed and the respondent is to pay the appellant's costs. Counsel for the Appellant: BJ Gross QC/LA Levy Instructed by: Patrick Timbs and Co Counsel for the Respondent: RC Tonner Instructed by: JM Meadows